Weakening US Data Tempers Fed Hike Bets, Boosting Gold

Weaker-than-expected US economic data, including the first drop in retail sales in nine months and deteriorating consumer sentiment, has dampened expectations for further Federal Reserve rate hikes. This shift in sentiment has triggered a broad-based decline in the US Dollar, providing a significant lift for gold prices to their highest levels since early June. Consequently, currencies such as the Euro and British Pound also gained against the weaker greenback, and systematic demand for gold from trading advisors has become more entrenched. fxstreet +12

Hawkish Leaning from European and Japanese Central Banks

Several major central banks outside the US are maintaining or signaling a more hawkish policy stance. Analysts expect the European Central Bank to deliver additional rate hikes to address inflation, while strong UK economic data provides support for Bank of England hawks. Meanwhile, expectations are growing for a Bank of Japan rate hike as soon as September, which has recently supported the Japanese Yen against the US Dollar. fxstreet +10

Robust Canadian Data Underpins Loonie

The Canadian economy is demonstrating resilience, with reports showing strong Q2 growth, rising wholesale trade, and firm domestic demand. This positive economic picture, along with a softer US Dollar, has provided bullish momentum for the Canadian Dollar, which strengthened against its US counterpart. fxstreet +4

Asian Growth Concerns and Broader Systemic Risks

Concerns over global growth are being influenced by economic signals from Asia and broader systemic risks. Reports indicate continued sluggish momentum in China's economic activity, which has contributed to a pause in copper's recent rally, while other regional central banks prioritize currency stability. Separately, analysts are pointing to the growing long-term risk posed by the market's capacity to absorb an increasing volume of sovereign public debt. goldbroker +5